Two Companies Sue Hoboken, Seeking to Void Hilton Hotel Deal

Nobody said it was going to be easy to bring the second hotel to the Mile Square City’s waterfront, and Jersey Digs has learned of a possible snag that has presented itself in the courts for a project that was supposed to be a done deal.

On November 15, two landowners near the approved Hilton site sued the city, Mayor Ravi Bhalla, the city council, and KMS Development Partners in Hudson County Superior Court. The companies who filed the suit are Hoboken Land Building LP, who own the 1 Newark Street property of the same name, and Hoboken Holdings LP, the ownership entity behind the Baker Waterfront Plaza building at 2 Hudson Place.

Hilton hotel, Hoboken. Rendering via Cooper Carry Associates.

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The legal action stems from last month’s approval of the latest version of a Hilton hotel at 1st Street and Sinatra Drive, which will feature 349 rooms among 20 stories and rise 270 feet at its tallest point. The final design increased the maximum gross floor area that was allowed in the initial redevelopment plan by 20% and upped the maximum number of allowable rooms by 25%.

In exchange for those concessions, KMS will donate $2 million to renovate the Hoboken Community Center at the former YMCA property to include a re-opened public pool, a branch of the public library, and space to expand the city’s pre-K program. Additionally, the company will spend $1 million to improve infrastructure along 1st Street, allocate $165,000 for infrastructure in adjacent neighborhoods, make a $1 million payment to the Hoboken Public Education Foundation, donate $484,000 to the Hoboken Public Charter Schools, and contribute $200,000 for Hoboken’s Affordable Housing Trust.

It’s those givebacks that are the crux of the seven-count lawsuit. The case argues that the giveback payments are “unrelated to legitimate land use concerns” and “constitute a blatant quid pro quo for the City’s acquiescence to the Redevelopment Agreement.”

“The Mayor has publicly stated that he would not have agreed to the Redevelopment Agreement but for the Giveback Payments,” the complaint states, noting that members of the council also made similar comments. The companies say that moves to both approve the redevelopment deal and amend the initial redevelopment plan in exchange for the givebacks “promotes favoritism, cronyism, lack of accountability, lack of diversity, and is otherwise unlawful.”

The case also takes issue with payments KMS will make to the schools. “The City is without legal authority to include in the Redevelopment Agreement the requirement that the designated redeveloper make a payment to a non-governmental entity such as the Hoboken Public Education Foundation,” the companies claim in the filing.

Two other points of contention in the lawsuit are claims that KMS hasn’t submitted a “comprehensive signage package to the city” and that before the meeting when the deal was approved, agents of the city required attendees to pass through security on an individual basis and only started admitting them at 7 p.m. The suit claims this allegedly created “a time-consuming bottleneck at the security checkpoint” that caused some members of the public to be unable to witness the beginning of the meeting. The resolutions passed by an 8-1 vote after over three hours of discussion.

The two landowners want resolutions approving the redevelopment agreement and amending the redevelopment plan declared null and void. Jersey Digs has reached out to city officials and KMS Development for comment on the case and will update this article with any future statements we receive.

In most cases the money is going to private organizations they chose as opposed to the general public. To politicians there is real benefit to have people or organization beholding to you for favors or funding. The betterment of the community like beauty is in the eye of the beholder.